ABOUT SEAN STANNARD-STOCKTON

Sean Stannard-Stockton is the president and chief investment officer of Ensemble Capital Management, located in Burlingame, CA, midway between San Francisco and Silicon Valley. From 2006 through 2012, Sean authored the Tactical Philanthropy blog and wrote regular philanthropy columns for both the Financial Times and the Chronicle of Philanthropy. In 2012, Sean officially ended the blog to focus on growing Ensemble Capital.

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A Better Word for Philanthropy

April 23, 2009 – 6:53 am

A few days ago I asked readers what “philanthropy” meant to you. In the post I cited a Center for High Impact Philanthropy study that showed that even donors who give over $1 million a year do not think of themselves as “philanthropists”. My sense is that philanthropy is a word that use to have powerful meaning, but which no longer resonates with the vast majority of donors. Words have power and what some is called (or calls themselves) can change their behavior. I wonder if we need to find a new word to replace “philanthropist” if we want individual donors to embrace a proactive, engaged, strategic approach to their giving.

Words like New Philanthropy, Philanthropy 2.0 or even Venture Philanthropy have been used as shorthand to label the behaviors and approaches to philanthropy that are currently in vogue. But calling some “new” X or X 2.0 is a lazy way to label something. For instance, “social media” is a far more powerful label than “web 2.0” because social media is descriptive and captures the differentiating element of the “new web”.

In response to my question to readers last week, Jeff Trexler offered this explanation for why the word “philanthropy” has lost meaning:

One reason why the word “philanthropy” may no longer resonate is that it is a word out of its time. A few hundred years ago, using a Greek derivative to convey a regard for humanity had ethical, philosophical and class connotations that are now all but lost. The narrowing of the term by the late 19th century reflects, in part, a subtle mode of legitimizing new mercantile and industrial wealth by associating it with the language of the educated elite. In short, the cultural factors that gave the word a distinct valence have long since receded, leave us with a term that has relatively weak signaling value.

Another factor contributing to the term’s apparent fade is the growing perceived incoherence of segregating charity–and in particular, the act of making charitable donations–from other forms of social benefit. This in turn reflects broader trends in cultural convergence that break down artificial divisions in both concepts and social class.

In this context, perhaps rather than shoring up the definition of philanthropy we may want to consider retiring the word altogether!

Any of us who work with rich people who give a lot of it to charity know that those folks never use the word “philanthropist” to describe themselves.

It’s a word the media put into vogue years ago when trying to establish nomenclature for members of the society set who gave lots of money to charity, but who had no precise “job” or title in the for-profit world which could be used as an ‘identifier’ when writing a story.

That is, a “philanthropist” was understood to be a “mogul” or “tycoon” (or the wife of a mogul or tycoon’s) who gave lots of money — and usually very publicly — to charity.

So, no, the high-net-worth do not use the term “philanthropist” to describe themselves any more than they use terms like “mogul,” “tycoon,” or even “rich” (how gauche!).

Back to the original question — few persons seem to have a problem with stating that they want to make change in the community or in the world… I tend to use the term “changemaking” as it incorporates goal, action, and noticeable result… “Changemaking” also removes the monetary component in the common understanding of “philanthropy.”

What if we wanted to propagate a new label to designate people who gave money in an effective, strategic, engaged way? What would it be?

I like the word social investor and I don’t think that any valid word will go in and out of style based on the stock market going up and down. But I wonder if trying to modify the word investor with social fails because the word investor is too loaded with positive and negative connotations that have nothing to do with philanthropy. I certainly think social investor is an accurate term, I’m just not sure it is a phrase that donors at large will embrace.

I like the term “social investor” – I think it’s descriptive of those donors who consider carefully the potential for return on their donations – are they investing money in an organization that is likely to produce positive outcomes for its clients (many organizations do not)?

We would still need a term like “donor,” or something along those lines, to refer to those who give without considering carefully the potential for return on their investment.

I’m not sure how the majority of donors would respond to the term, but I wonder if using “social investor” wouldn’t be a good opportunity to encourage people to think differently about giving?

It shouldn’t be simply about giving to a good cause; it should be about giving to a good cause where the money will be used in such a way that positive outcomes are likely to result. I think the majority of donors/philanthropists/social investors would be surprised at how many organizations have no idea whether they are doing good, being ineffective or even – unintentionally – doing harm. Yet evaluations show that organizations easily fall in any one of those categories, including the latter.

Creating social value is no easy task. I think we all have a responsibility to consider the implications of our donations, and “social investor” is a term that conveys that.

Social Contributor, Social Allocator, or Social Investor. I like having the word “social” involved.

I also have noticed that the term donor or funder is preferred over philanthropist. High Net Worth Individual (HNWI) is nice because it can be used as an acronym but even then doesn’t necessarily mean a person who donates to the common good.

I actually like the word Philanthropist, (though maybe I’m biased because I’m from Philadelphia and enjoy the word association). 🙂

Sorry to come late to this discussion, especially as it touches on a topic that Bob Payton and I spend some time wading through in our book from last year. We argue FOR the use of “philanthropy” as a broad, affirmative term that can encompass voluntary giving, voluntary service, AND voluntary associations (i.e., “nonprofit” organizations and the sector). A couple quick points, then, from this perspective:

We should remember that the word “philanthropy” can have uses beyond just the derivation into “philanthropist,” and can be helpful as a way to describe a range of social activities at a level that is somewhat comparable to the broad umbrella terms “business” and “government” (or “politics” to be more conceptual about it). Having such a general umbrella term is important for a lot of reasons (including legitimacy of the activity), and philanthropy fits that bill better than the others that are often offered, like “nonprofit sector,” “charity,” “third sector,” “voluntary sector,” “voluntarism,” “social sector,” “social economy,” “civic sector,” or even the one that is probably the best alternative candidate, “civil society” (which has other connotative problems). If we want or need a term at this level, I think philanthropy can serve in that role. It emphasizes the positive and public good-orientation of the activity, isn’t limited to the idea of a set of institutions or formalized practices (like “sector” is), and has much less negative historical or popular baggage than other words at this level like “charity.”

Yes, Jeff Trexler is right that the term philanthropy once carried a popular meaning that associated it with attempts to legitimize industrial fortunes. But that isn’t the only understanding attached to or clinging to the idea over the years (I’d argue that the definition of philanthropy as just about giving money is far more resonant, and troublesome, today), and there are plenty of other positive uses of the term. In fact, those same industrial tycoons (and others) at the turn of the last century, by developing what they called “scientific philanthropy,” gave us the meaning of philanthropy as strategic, business-modeled, utilitarian giving-for-impact-not-emotion that is the inspiration for many of the hot developments in the field today. Philanthropy carries that cultural meaning also.

My second, briefer point relates to the question of the diversity of the set of activities, actors, motives, goals, ideas, and so on that we are (or should be) attempting to capture with our umbrella term. All of these range tremendously in this “field”—from recent grads canvassing for Greenpeace to evangelists founding universities—and this diversity is a healthy thing. There are formal and informal acts of giving or serving, very small and very large organizations, conservative missions and revolutionary missions. And what ties them all together is that they represent voluntary attempts by people working to pursue some shared vision of the good (at least shared by those who are pursuing it). So we need a term that is general, even abstract, enough to capture this diversity, and one that emphasizes the positive mission orientation that connects these diverse actors/activities/goals. Again, I think philanthropy, when defined in a broad way, fits both of these criteria.

Great comments Michael. I can buy into the idea that Philanthropy is still a relevant word in the context of labeling the “third sector”. I guess I’m most interested in the word “philanthropist”. Your comment clarifies for me that when I point to the U Penn study I’m pointing to the fact that high net worth donors do not identify with the label “philanthropist”.

As much as I can see the accuracy of “social investor”, it seems to me that the popularity of the phrase “socially responsible investing” has forever set up the connotation that a social investor is someone who makes profit seeking investments with an eye towards social metrics. While I believe that the spectrum from profit seeking to giving away is collapsing, there will always need to be a unique name for the person who gives money away with no financial return expected.

“Social investor” is a good word to describe the blended value space between pure profit seeking and philanthropy, but I don’t think it satisfies the need for a word that describes people who give money away.

I think your (Sean’s) question hit the spot: it’s giving money in an engaged way. Which separates one from being a “donor” or a “volunteer” – there’s more going on here, and both of those words still work in their space. But if you’re both giving money and working with the recipient to ensure the highly effective use of that money, that category does need a label. Since the prerequisite is money (I don’t think just volunteering is the same game), then a construct on donor or funder seems to make sense. Although “social” doesn’t seem to be the right prefix for me, it doesn’t necessary involve a lot of people directly. What word, though, I’m afraid I’m at a loss. I do like incorporating the concept of leverage and/or change.

The question about what to call individuals who do this sort of voluntary public good-focused work, or what they call themselves, is a more difficult and delicate one, I think. This is in part because “ist” labels tend to get used against people in unproductive ways (e.g., “capitalist”!), and because it is a bit dangerous to start telling someone how they should label the personally meaningful work they are doing (even if done in the spirit of helping bring people together for good).

I personally think “philanthropist” is open to a positive and helpful redefinition (or rebranding if you will). And it can be adapted to fit individual cases by modifiers. So Social Venture Partners are “engaged philanthropists” or “philanthropic leaders” (they use the term “philanthropy” a lot, actually). Also, it seems fine for people who BOTH give without receiving a return AND invest in socially responsible ways (for return or not) to signal this diversity in their personal strategies by using more than one label. So Pierre Omidyar can be a “philanthropist” and a “social entrepreneur.” Or he can call himself by some preferred term–selected after a great deal of reflection on his means and ends, as he has done–that blends and captures things in a way he likes.

So to your point, Sean, I’m not sure the search for a defining term at the level of “social investor” or “philanthropist” or “social entrepreneur” or whatever is something that brings as much benefit as the attempt to clarify the meaning of “philanthropy” as a general term for the activity/field/space. And trying to decide on a single preferred “ist” term can even have a downside if it curtails in any way the attempts by individuals to think deeply about why they are doing the work they do–and why they chose their particular strategies (often plural)–and then to come up with a term to describe themselves that has meaning for them. “Social entrepreneur” is a potentially very useful term, but some grassroots actors who are called that hear it, say “that’s very interesting,” but then still prefer to call themselves “activist” or some other term (often one that has cultural meaning in their context–but that opens a whole other can of worms).

Of course, coming up with a term like social investor can have the effect of PROMPTING reflection, and that is great. I’d encourage discussion of such a term like you’ve done here. I would argue, though, that having a few such terms (to fit the diverse strategies in the field) enriches the reflection of individual actors more than having one preferred term (I think you are saying this also).

I realize that this view makes it very hard to build a movement. But again I’d go back to the beneficial effects of diversity. I think it is very healthy for us to have a growing range of strategies for pursuing our visions of the good, and to have some good general umbrella categories like “philanthropy” and “business” and even some broad term for blends of those like “social investment” or “social enterprise.” And then under those broad rubrics we let people innovate, think about their work, label themselves, hopefully create small cohorts of like-minded folks and/or share their reflections, and then (most important) use this name-reflection as inspiration to get out and keep doing the work.

One of the problems with anything that modifies “investor” is that the word implies a financial return. So what about “impact donor”? Everyone knows what a donor is. Impact, I think is the defining word that cuts across all cause areas and implies that the donor is looking for results.

And it sounds OK, “Susan, you should meet my friend Joe. He’s an impact donor and he might be really interested in your program.” Or “OK team, we need to create new marketing material that appeals to impact donors. While we’re doing OK with major donors in general, I don’t think our message is really connecting with impact donors.”

Hi Sean et al – I think the real issue is not what or how donors think of themselves but in how we treat them. To that end, I think the notion of “making an investment” in a cause, organization, or need is more powerful than simply “giving” or even “donating”. It implies a partnership, something we have seen resonates with people.

Also, while I kind of like the notion of an “impact donor”, your post implies that you could also have “non impact donors” and I’m not sure you’d have donors lining up to join that camp.

I think Impact Donors are self identified people. Those who are striving to achieve impact. Other donors would just be “donors”. There’s nothing derogatory in the idea that a donor is not impact focused. Most donations are not intended primarily as impact maximization, most all are about a whole range of other issues.